Poughkeepsie’s IDA asked to help with 55-year-old building

Poughkeepsie’s Industrial Development Agency (IDA) is being asked to provide financial assistance for the acquisition and rehabilitation of a 179-unit affordable apartment complex known as Rip Van Winkle that’s located at 10 Rinaldi Blvd. in Poughkeepsie adjacent to the Hudson River. The IDA held a hearing on the proposal at its July 27 meeting at which time some public opposition to the plan was voiced.

Originally built in 1968, the building is on 4.9 acres and serves low-income families that qualify for Section 8 housing. Section 8 is a federal rental assistance program of the Department of Housing and Urban Development that is administered by local offices.

The 18-story Rip Van Winkle building has 37 one-bedroom units, 90 two-bedroom units, 40 three-bedroom units and 12 four-bedroom units. There are approximately 169 outdoor parking spaces. Amenities include a laundry room, community room, business center, front desk, reception area, management office, vending machines and building security that includes patrol guards.

Applicants Related Affordable LLC and RVW Preservation L.P. have applied for IDA financial incentives. Their parent company is The Related Companies L.P., based at Hudson Yards in Manhattan. Also involved in the project is Hudson Housing Capital LLC, a syndicator of low-income housing tax credits. The property currently is managed by PK Management LLC, which is a professional property management company with a national, diversified portfolio. The plan is for PK Management to continue managing the property.

The applicant is applying for real property tax benefits in the form of a PILOT (payment in lieu of taxes) agreement, sales and mortgage tax exemptions as well as tax-exempt bond financing. There will be an estimated mortgage of $37 million and the applicant is asking the IDA to float that amount of tax-exempt bonds. The applicant plans to invest an estimated $11,102,650 in improving the building. About $6,887,877 is expected to be spent on taxable materials associated with the rehabilitation. The applicant is asking the IDA for sales tax emptions of $559,640 and a mortgage recording tax exemption of $354,690.

The applicant says that the rehabilitation project would create 40 construction jobs and retain the current eight permanent jobs at the Rip Van Winkle property. It describes the proposed renovations as including but not being limited to bathroom and kitchen renovations, Americans With Disabilities Act unit upgrades, new flooring and painting, window and entry door replacement, interior and exterior lighting upgrades, installation of Wi-Fi throughout the building, general signage upgrades, parking lot and concrete repairs along with a new playground and landscaping. It’s estimated that once renovations begin it will take about a year to complete the work.

“Residents will not be able to remain in their respective apartments while in-unit interior work is being undertaken. Instead, when a block of apartments is scheduled for renovation, the affected residents will move into ‘on-site hotel’ units at the property or actual off-site hotel rooms arranged in advance by management,” the application said. “Any unoccupied units at the time sponsor commences construction may be used as on-site hotel units. With the help of professional movers coordinated by management and the general contractor, residents will be able to move all necessities and essential belongings into the on-site hotel units or to the off-site hotel rooms, with larger items to remain in the unit or be placed in secure storage.”

The application points out that because the building is currently occupied, what is proposed will have no impact on enrollment in the Poughkeepsie schools. It notes that the immediate neighborhood is largely made up of small and midsize apartment complexes built between 1940 and 1969 that are mostly renter-occupied.

One of those expressing opposition the proposal was the former chair of the Poughkeepsie IDA, Melanie Vetter. Vetter resigned from the agency in 2021. Although the IDA commissioned a study of financial aspects of the proposal by a consulting firm, Vetter said that an even closer look at the financials is needed.

“We should absolutely dig deep into these numbers and understand exactly what’s going on,” Vetter said. She said that the money that is proposed to be spent on the renovations should result in more than what she views as superficial improvements. She said that residents of the building have complained to her about it being too cold in the winter, too hot in the summer, and water flow and temperature from the faucets being difficult to properly set.

“The IDA’s mission is to provide economic development and jobs in the City of Poughkeepsie,” Vetter said. “I do not think this project qualifies for bonding or for PILOT benefits. The project only has eight jobs that will be maintained and no incremental jobs are on the horizon.”

Vetter said that the building will not spur economic development on Poughkeepsie’s waterfront because the residents of the building have little to no discretionary income to spend and that’s why they’re looking for low-income housing. She said that the building would not attract visitors because it’s not a destination.

“The IDA is not and has not been an agency that provides significant benefits for housing alone,” Vetter said. “Even if the IDA wanted to explore the benefits it would like to provide for housing this project will not create the infrastructure improvements the building requires. The applicants are asking for huge city benefits and bonding to put ‘lipstick on a pig.'”